Shutdown looms in clash over healthcare

The United States Government is moving perilously closer to a shutdown amid a deepening stand-off between the White House and Republicans demanding a roll-back of President Barack Obama's controversial healthcare legislation.

The prospect of a shutdown on Wednesday increased sharply after a Republican plan was last night passed by 231 to 192 in the House of Representatives. It seeks a one-year delay to the health reforms in exchange for funding the Government.

But Obama has already repeatedly ruled out making any concessions over the so-called "Obamacare" legislation, which was passed by Congress and cleared last year by the US Supreme Court but is still fiercely opposed by Republicans.

The President used his weekly address to reiterate his stance: "I don't know how to be more clear about this: no one gets to threaten the full faith and credit of the United States of America just to extract ideological concessions," he said. "No one gets to hurt our economy and millions of innocent people just because there are a couple laws you don't like. It hasn't been done in the past, and we're not going to start doing it now."

The mounting crisis comes after a week of back-and-forth between the Democrat-controlled Senate and the Republican-controlled House over how to pass a stop-gap budget measure called a "Continuing Resolution".

The current resolution expires tomorrow afternoon NZT and Republicans are refusing to pass a new one unless the White House makes concessions on Obamacare.

Last week the Senate rejected a previous draft of a resolution that refused funding for Obamacare and returned it to Republicans to reconsider. But after a meeting on Capitol Hill, Republicans said they would push for a one-year delay in the law - a "compromise" move that Democrats and the White House have already indicated is unacceptable to them.

The debate over whether to use government funding as a weapon to extract concessions over Obamacare has bitterly divided the Republican Party, setting a more moderate leadership against a hardcore element of ideological, small-government Tea Party members.

After yesterday's House vote on the new draft of the Continuing Resolution, it will go back to the Senate where it will almost certainly be rejected, triggering the first shutdown since 1996. It has been estimated that a government shutdown, which would see many non-essential services such as parks and passport offices close, could cost the US economy up to US$2 billion ($2.4 billion). About 800,000 US federal government workers would be put on temporary unpaid leave.

The fight over passing a Continuing Resolution prefigures a potentially much more serious row next month, when Congress will have to extend the US debt ceiling which the Treasury reckons will be reached by October 17. Economists warn that if partisan politics leads to a failure to agree to a new debt limit it would have far-reaching results for the US and the global economy as the world's reserve currency is threatened with default.

US showdown

Republicans

House Republican plan would assure routine funding for government agencies until December 15. It would also repeal a tax on medical devices that helps pay for the healthcare law. Portions of that law are in effect and would remain unchanged. The measure would delay implementation of a requirement for all individuals to buy healthcare coverage or face a penalty, and of a separate feature of the law that will create marketplaces where people can shop for coverage from private insurers. A companion measure assures troops are paid in the event of a shutdown. Some Republicans fear their party would bear the blame for any interruption in services and weaken Republicans heading into a battle later in October over raising the debt ceiling to allow the government to borrow more money.

Democrats

The White House has issued a veto threat and Senate Democrats vowed to reject the measure even before the House of Representatives passed the Republican plan. Senate Democrats have the votes to block a one-year delay to Obamacare.

The consequences

Possibly the first partial closing in almost 20 years. A single version must be approved by Congress and signed by President Barack Obama by Wednesday. Some critical services such as border patrols, inspecting meat and controlling air traffic would continue. Social security benefits would be sent and the Medicare and Medicaid health care programmes for the elderly and poor would continue to pay doctors and hospitals.